After months of speculation, Colombia’s government has finally presented a long-awaited draft healthcare reform to congress. It includes a radical overhaul of the public healthcare insurance sector, doing away with the role of the Health Promoting Entities (Entidades Promotoras de Salud, EPS) as intermediaries. The reform also includes extensive measures to shift the focus of the health system towards primary and preventative care, particularly in rural and suburban areas of the country that are currently underserved.
The EPS currently collect compulsory monthly payments from employees and the government. This funding is used to contract health providers to care for beneficiaries. There are numerous EPS in the country that have fulfilled this role as financial intermediaries for over two decades. However, these EPS have recently become heavily indebted and accused of delaying payments to health providers. Several have also gone bankrupt. Last year, left-wing President Gustavo Petro was elected on a reformist platform that aimed to reduce inequality and increase welfare spending. Petro and his Minister of Health, Carolina Corcho, are both strongly against the concept of private entities being responsible for the management of public funds.
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They have, therefore, used the EPS’s financial instability as a justification for the health reform, which proposes that all spending should be centralised under a single public entity that would pay healthcare providers directly. Critics argue that the Administrator of the Resources of the General System of Social Security in Health (ADRES) does not possess the technical capabilities or the expertise necessary to fulfil this role, and that it would be unable to replicate the EPS’s decades of experience in managing and auditing payments. In response, the government has permitted the EPS to continue to exist in a new role, specifically providing auditing and billing services, supplying specialised technology and software, and acting as advisors to public authorities.
A less discussed and more positively received part of the reform involves the proposed investments in primary care. This would involve establishing more general practice clinics throughout the country and investing in diagnostic capacity. This has long been called for as Colombia has a poor record in primary care outside of major cities. The majority of cancer diagnoses are typically made in the later stages of disease. In rural areas, people have little access to primary care and annual cancer screenings. Often, the only way people can access the health network is by going to a hospital emergency room, typically once they are already sick. In addition to poor early diagnosis, this also leads to long wait times at hospitals, which can likewise worsen health outcomes.
Investing in primary care could, therefore, have the dual benefit of reducing pressure on hospitals and lowering costs by catching diseases earlier, when they are the most easily treated. Aside from the obvious benefit to patients in terms of outcomes, an increase in the number of patients who are able to be diagnosed will also mean a greater demand for medicines, especially in oncology.
As far as the industry is concerned, the most relevant outcome of ending the EPS will likely be disruption. With the responsibility for the payment and contracting of healthcare providers shifting from the EPS to a public institution, it seems inevitable that at least some patients will have to change providers and possibly have their treatment interrupted, negatively impacting access to medicines.
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By GlobalDataThe healthcare reform bill is currently only a draft. Petro has shown impressive skill in ushering reforms through congress, such as the recent tax hikes on energy firms and the wealthy. Given the controversies around the healthcare reform, however, it is likely that the draft reform will need to be amended if it is to secure a majority vote. While the EPS are far from popular, many doctors’ unions have spoken out against the reform, negatively impacting its chances of passing. It is currently unclear whether or not the government will secure the votes necessary to pass the reform, but more will be known once the congressional debate is fully underway.
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